WASHINGTON — Under a rule released Wednesday, regulators will give incentives for banks to help revive foreclosure-ravaged areas.
The final rule by the federal banking agencies provides Community Reinvestment Act credit to banks that assist projects in the Neighborhood Stabilization Program. The regulation will go into effect 30 days after it is published in the Federal Register.
The NSP, established by a 2008 law and run by the Department of Housing and Urban Development, makes funding available for rehabilitation efforts in communities with high rates of foreclosures, delinquencies and subprime mortgages.
The regulators said they were expanding certain CRA definitions to award institutions that support such projects. For example, a bank can receive credit for financing community projects to purchase and redevelop affected properties. The final rule is largely the same as a June 24 proposal.
"There is a pressing need to provide housing-related assistance to stabilize communities affected by high levels of foreclosures," the agencies said.
